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I think this is just Microsoft way of trying to promote Xbox Live to those who normally would not take their Xbox on-line.

Regardless of their intention, I think it's a great idea and I think they really should do more cross promotion and give out freebie to fans and customers. Live tends to have this stigma of a place where Microsoft nickel and dime all the microtransaction out of you. Maybe giving stuff away for free will help lessen that.

If I was Microsoft and trying to get Xbox users to warm up to their Avatars, I would make sure to give out free Avatar cloths/outfit as part of their promotions. Halo T-shirt, or Viva Pinata hats would go a long way into converting the haters. (or those who are indifference like me).